Mastercard Integrates AI to Fight Crypto Fraud
- Mastercard will leverage artificial intelligence to spot and combat crypto crimes.
- The payment company has struck several partnerships with crypto companies in recent months.
- Reports show that crypto crimes have surged in recent years.
Mastercard is working to help spot and stop criminal activities that leverage cryptocurrency exchanges. The payment provider has partnered with Feedzai, a platform that uses artificial intelligence to battle online financial fraud and money laundering.
As part of the partnership, Feedzai will directly interface with Mastercard’s CipherTrace Armada platform. Several banks leverage this tool to track transactions from several crypto exchanges and spot crimes such as money laundering and other questionable activities.
Both companies have described the partnership as mutually beneficial. Feedzai claims to leverage artificial intelligence to detect and thwart illicit transactions in “nanoseconds.” The company believes its services are crucial due to the rising cases of crypto crimes.
According to Feedzai data, nearly 40% of fraudulent transactions move straight from bank accounts to cryptocurrency exchanges. Feedzai’s CEO, Nuno Sebastio, said Feedzai’s technology will help protect “unwary consumers” by tracking money laundering activities and spotting mule accounts.
Sebastio said in a statement:
Numerous banks that believe they are preventing illegitimate cryptocurrency transactions are, in fact, only blocking transactions involving the widely recognized and regulated entities within the crypto space and omitting the rest.
Several reports suggest that crypto crimes have increased since last year. Ajay Bhalla, president of cyber and intelligence solutions for Mastercard, remarked that the “interconnectedness of life today and increasing digital penetration of finance has brought risk as well as opportunity.” Bhalla added that new data “shows fraud on transactions where people are buying crypto is 5 times higher than regular fiat transactions.”
Mastercard continues to expand its presence in the crypto market
The new partnership shows Mastercard’s efforts to establish cryptocurrency as a legitimate financial asset that can be governed by the same laws and regulations as more conventional assets.
Mastercard has already launched several crypto-related products and partnerships. In July, Mastercard released an AI-powered tool to help banks and payment platforms address financial scams.
Mastercard also struck partnerships with crypto platforms like Binance and Nexo. However, the payment company called off its collaboration with Binance in August. Many believe the decision was due to Binance’s regulatory concerns and claims that the exchange aided financial crimes.
Most crypto companies have struggled to find mainstream financial partners. Banks in the United Kingdom have shown reluctance to be affiliated with cryptocurrency. Several major lenders have stopped allowing transactions with cryptocurrency exchanges on their networks, citing concerns about fraud.
Prominent financial institutions like HSBC, JPMorgan, and NatWest have either banned or limited cryptocurrency transactions. This shows that while crypto has gained the spotlight, the industry still has a long way to go to build institutional trust.